Oil sets another 3-year high, settling at $67.39 and posting an 8.6% weekly gain on geopolitical tension

Key Points
  • President Donald Trump's comments about possible military action in Syria and reports of dwindling global oil stocks boosted oil prices.
  • OPEC and International Energy Agency see oil markets tightening.
  • China's March crude oil imports were the second-highest on record, data show.
Oil pumpjacks in silhouette at sunset.

Oil prices were higher on Friday, posting their largest weekly gain since July after U.S. President Donald Trump's comments about possible military action in Syria and reports of dwindling global oil stocks.

U.S. West Texas Intermediate crude for May delivery ended Friday's session up 32 cents to $67.39 its best weekly performance since July. The contract earlier touched its highest intraday level since Dec. 4, 2014.

was up 58 cents at $72.60 a barrel by 2:26 p.m. ET and also set for a weekly gain of more than 8 percent going back to July.

sought to lock in long crude positions — or bets that prices will continue to rise — ahead of the weekend, said John Kilduff, Partner at hedge fund Again Capital Management.

"The geopolitical jitters just keep getting priced in here more and more, as we get closer to the moment of the strikes, if there are any," Kilduff said, noting Syria posed a risk to global stability because of its relationship with other powerful oil producers.

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"Syria is a client state of both Russia and Iran and the risk for escalation is quite high and I think that is what the market is worried about."

Both oil benchmarks hit their highest since late 2014 on Wednesday after Trump warned that missiles "will be coming" in response to a suspected gas attack in Syria and after Saudi Arabia said it intercepted missiles over Riyadh.

Trump tweeted on Thursday that an attack on Syria "could be very soon or not so soon at all", raising the prospect that an attack might not be as imminent as he seemed to suggest the previous day.

"The Syrian escalation risk cannot be fully written off, but we view that it deserves less of a premium than three days ago," Petromatrix said in a note.

A global oil stocks surplus is close to evaporating, OPEC said on Thursday, adding that its collective output fell to 31.96 million barrels per day (bpd) in March, down 201,000 bpd from February.

Vienna-based OPEC and its oil producer allies are poised to extend their supply reduction pact into 2019 even as the global glut of crude looks set to be eradicated by September, OPEC Secretary-General Mohammad Barkindo told Reuters.

What you see is a shift in the oil market, says energy expert

The International Energy Agency (IEA), which coordinates the energy policies of industrialized nations, signaled on Friday that markets could become too tight if supply remains restrained.

"It is not for us to declare on behalf of the Vienna agreement countries that it is 'mission accomplished', but if our outlook is accurate, it certainly looks very much like it," the IEA said.

Meanwhile China's March crude oil imports climbed month on month to the second-highest level on record.

U.S. drillers added seven oil rigs in the week to April 13, bringing the total count to 815, the highest since March 2015, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.

— CNBC's Tom DiChristopher contributed to this report.